Revealed: March 17, 2023 at 10:32 a.m. ET

By Ed Frankl

An financial index that measures U.S. enterprise cycles declined in February for an eleventh consecutive month, additional rising the chance of a recession this 12 months.

The Convention Board stated Friday that its Main Financial Index fell 0.3% to 110.0 in February, the identical share decline as in January. The determine was barely…

By Ed Frankl

An financial index that measures U.S. enterprise cycles declined in February for an eleventh consecutive month, additional rising the chance of a recession this 12 months.

The Convention Board stated Friday that its Main Financial Index fell 0.3% to 110.0 in February, the identical share decline as in January. The determine was barely higher than the anticipated 0.4% fall in line with economists polled by The Wall Road Journal.

“Whereas the speed of month-over-month declines within the LEI have moderated in current months, the main financial index nonetheless factors to danger of recession within the U.S. economic system,” stated Justyna Zabinska-La Monica, senior supervisor, enterprise cycle indicators, at The Convention Board.

Essentially the most-recent monetary turmoil within the banking sector isn’t mirrored within the LEI information however might have a unfavorable impact on the outlook if it persists, Ms. Zabinska-La Monica added.

The Main Financial Index is a predictive variable that anticipates turning factors within the enterprise cycle by round seven months. The indicator is predicated on 10 components–eight of which fell or have been flat in February–among them preliminary claims for unemployment insurance coverage, producers’ new orders, constructing permits of latest non-public housing models, inventory costs, and shoppers expectations. It’s supposed to sign swings within the enterprise cycle.

The index was dragged in February by deteriorating shoppers’ expectations of enterprise situations, new orders and credit score situations, which greater than offset bettering inventory costs and a better-than-expected studying for residential constructing permits, Ms. Zabinska-La Monica added.

The Convention Board expects the U.S. economic system to enter a recession this 12 months amid rising rates of interest paired with declining client spending.

The Coincident Financial Index–a measure of present financial activity–rose 0.1% to 109.8 in February, whereas the Lagging Financial Index elevated 0.2% to 118.5, The Convention Board stated.

Write to Ed Frankl at edward.frankl@wsj.com